RICO “Mob” Law Used Against Big Tobacco Companies

Both sides of a high profile big tobacco case are contesting a recent verdict by the Washington, D.C. Federal Court of Appeals, according to several reports. The defendants, three tobacco companies including Phillip Morris, now known as Altria, want the verdict overturned by the U.S. Supreme Court. The plaintiff, the federal government, wants additional rulings on releasing money from the companies that they see as “ill-gotten gains.”

As it stands, the D.C. court charged the defendants with violating RICO laws by “conspiring” to lie about the health risks of smoking cigarettes. The Racketeer Influenced and Corrupt Organizations Act or “RICO” was originally part of a set of laws intended to help the federal government crack down on organized crime. Federal prosecutors have used RICO laws against major crime syndicates. The use of RICO against big tobacco has far-reaching implications for business law. If the U.S. Supreme Court takes the case, those on both sides of the aisle will be watching intently for a ruling on whether the companies must pay up to $289 billion. This sum was originally sought by the federal government under the Clinton administration as a “remedy” for the negative health affects the companies caused to the American population.

How does RICO apply? The appeals court found that the companies had coordinated marketing activities and sought to deceive the public about health risks. Arguments for the defense include the claim of improper application of the RICO law.

The case against big tobacco remains one of the most deeply controversial business law cases of our times, and a U.S. Supreme Court decision would go a long way toward resolving it. The application of RICO is only one part of how the judicial system’s treatment of tobacco companies will help provide historical context for the “smoking era” as today’s America continues to push back against the harmful health effects of tobacco products.